Residential markets in Philadelphia, PA and its surrounding suburbs tend to be more conservative. Our local market has seen its share of price increases over the past couple of years however, at a lower rate than other parts of the country. We are not insulated from downward market conditions, but a more controlled upswing often translates into a less severe downswing. It’s important to recognize that national news coverage of the housing market does not necessarily reflect local activity.

The Philadelphia area has many submarkets. These submarkets may include specific counties like Montgomery County or Delaware County. This can be broken down even further. Market areas are often defined by school district. Market conditions analysis can be focused on the municipal level. When appraising a home in the Borough of Conshohocken or in Plymouth Township, market statistics specific to those areas better reflect the health of the market in which the house is located. Nationwide housing trends do not accurately portray market conditions facing a home in Upper Darby. More granular research is required to understand current market conditions as they relate to the specific home being appraised.

Every appraisal is specific to the home in question. In addition to a professional opinion of value, a home appraisal report should include conclusions about local market conditions and trends. Items such as the current supply of homes offered for sale, marketing times and list price vs sale price variances offer valuable insight. Recent homes sales provide a basis for the value estimate.  Analysis of currently active listings also gives relevant insight.  They show the most current market activity. These homes would be in direct competition if the house being appraised were placed on the market. It’s unlikely buyers would pay more than what a similar home is being offered at. Current listing with pending purchase agreements gives additional insight. These listings confirm that buyers are willing to purchase these homes at a specific price level.

While no one can predict the future, most people will agree that the current real estate market, both nationally and in the Philadelphia area, is in the process of change. When making any financial decision involving one’s home, it’s important to have a thorough understanding of up to date, local market conditions. A comprehensive home appraisal provides the knowledge needed to make informed decisions.